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Location, location, location

Location, location, location

Although a person's home might be considered their castle, a reseller's office location is definitely their command centre, operations base and quite often battlefield. So just how important is location when it comes to a business' success?

Perhaps more important than one might think. That is, unless you're a dot-com startup, in which case the basement of your parent's house seems the most appropriate place from which to launch total world domination. But for the rest of the real world, office location touches on every aspect of a company's business, from quality and retention of staff, supply and availability of product, right through to blind luck. And more and more companies are taking a strategic approach when deciding on new digs.

So what does a location have to offer? Despite an increasing push towards e-commerce and e-procurement, business is still largely about people; employees, business partners and, of course, the ever-glorified customer.

With Sydney's suburb of North Ryde unofficially christened Australia's Silicon Valley, other high-tech industrial zones and technology parks are springing up in capital cities across Australia. This seemingly flies in the face of Internet and industry hype suggesting geographic location is no longer as important a factor for a business' success.

Clive Taylor, director of Industrial, at property management and research firm Jones Lang Lasalle, believes the rise of high-tech industrial zones located in suburbs outside the CBD stems from international trends towards a lifestyle approach to designing business locations.

"I think what's happening is international companies out of the US, and to a lesser extent Asia, like the campus-style facilities if they can find them," said Taylor. "It's a lifestyle choice."

Taylor claims companies are looking to areas which provide good amenities like parks and gyms, and provide a viable alternative to the "smoky environment" of the city.

According to Taylor, aesthetic environments and abundant amenities also help companies with staff retention, and close proximity to universities or other tertiary institutions provide firsthand access to a breeding ground of tomorrow's employees.

Councils are also coming to the party, with many government sectors offering strong incentives to attract clean industries. In the 1960s, Ryde Council set aside the area surrounding Macquarie University for the development of R&D industries, but it wasn't until a decade later that the plan started to come to fruition. Today, North Ryde is home to more than 500 IT and communications companies and is estimated to employ around 100,000 people.

"Zoning restrictions in North Ryde stipulate a company can only develop around 30-35 per cent of the site, as opposed to 60 per cent in more traditional industrial areas. The reason being, [is that] councils want more aesthetic industrial areas rather than the old smoke stack factories of the past. Also, the limited development leaves room for landscaping and car parks," Taylor said.

Taylor also mentioned that while most companies lease the land, many elect to have their own buildings built by developers to suite their needs. "A lot of these companies are growing so quickly they need the option to expand," he said. "And they want to spread out, rather than up."

Lower rent is also an attractive factor for companies looking to set up an office at these "green field sites," Taylor said. Take North Ryde for example. A company can expect to pay up to 50 per cent less per square metre of office space than in Sydney's CBD and up to 40 per cent less than in nearby North Sydney.

Despite its considerably cheaper rent, North Ryde is still very close to the CBD and, according to Taylor, is close to the employee base with many of these companies' senior executives residing along Sydney's North Shore.

Further north in Brisbane, two IT centres are emerging. Traditionally, the more central location of Brisbane's Milton has been home to Queensland's IT elite. However, more and more technology companies are moving to the adjoining suburbs of Newstead and Fortitude Valley. With a mix of IT companies - from vendors, to retail and everything in between - a lot of companies are setting up shop in the older, Victorian style buildings which is quite de ultima moda.

Nick Day, director of networking company Netwise Australia, doesn't place too much emphasis on location, but does agree with the ease of business offered by his Fortitude Valley location.

"It doesn't really matter where you are, but from a business perspective it's a lot easier not to have to fight for a car park," Day said.

South Australia's answer to North Ryde and Milton is the Technology Park Mawson Lakes development located 20 minutes (by car) from Adelaide's CBD. The park is home to around 50 high-tech companies and is flanked by an extensive housing development (at a cost of $850 million) and the University of South Australia campus.

Eric Olsen, business manager for Technology Park Mawson Lakes, claims the park is currently running at 2000 workers and looking to grow that to 4000 in eight to 10 years.

Having just returned from the International Association of Science Parks in Edinburgh, Olsen claims that companies want a suburb location close to the CBD, but still maintain lifestyle services nearby - such as salons, cafés, wine bars, gyms and pools.

"Frankly, that's what these high-tech companies want," said Olsen. "If they have a suburb location then they also want a bit of the buzz of the city."

The Park is the result of a collaborative effort by the South Australian Department of Industry and Trade, Delfin Property Group, Lend Lease Corporation, the University of South Australia and local government representatives. It features conference centres, meeting rooms, high-speed Internet access to all the buildings, as well as cable Internet connection to any of the houses within the Mawson Lakes development.

According to Olsen, this provides a "hassle-free business environment" for SMEs looking to grow their businesses while attracting young staff.

"Mawson Lakes is next to the University so these companies can set up research agreements and also provide training and incubation of their future staff."

Olsen believes that being close to other companies ensures resellers can establish strategic partnerships with greater ease and efficiency when either company identifies a common market, not to mention the advantages for developers situated next door to vendors.

In this vein, one of the biggest benefits Olsen sees for SME channel companies is the ability to group or "cluster" together to bid for tenders.

"Clustering enables companies to compete against bigger companies for the tender. But they can also work with the vendors in approaching a customer's solution," Olsen said. "The classic example is Defence contracts," which Olsen claims encompass nearly a third of the business conducted at the park.

Despite their rising popularity among IT companies, not everyone is sold on the idea of technology parks. Marc Heymann, managing director of Melbourne networking channel company Austnet Support Group, prefers the prestige of being in a recognised IT district in the heart of the city.

"Why would I want to be in a tech park when I'm on St Kilda Road?," Heymann said.

Melbourne's IT industry fluctuates between the districts of South Melbourne and St Kilda Road, with the latter resembling an IT version of the Auto Alleys phenomenon of the early 80s - a stretch of information technology companies almost as far as the eye can see.

Austnet Support Group has been in the St Kilda Road area for the best part of a decade and Heymann claims the location is ideal for accessing the majority of Melbourne's suburbs.

"All roads lead to Rome, in this case to St Kilda Road," Heymann said. "If you have a St Kilda Road address, then you're perceived as being in the heart of things. The others [suburbs] are . . . well, out in the Boonies a bit really."

According to Heymann, another advantage of being in the IT heartland is that the majority of IT conferences and functions held in Melbourne are geared towards that precinct.

The prestige factor associated with having a favourable address is not to be discounted. With company branding and image so vital from a marketing perspective, it is little wonder then, that many channel companies attach a great deal of importance to the four numbers that appear in the post code section of their business address.

Surrounded by like-companies and the proximity of being close to some of the world's largest vendors, Sue Weatherly, director of environmental standards (town planning) for Ryde Council, claims Sydney's North Ryde area and nearby Riverside Corporate Park - formerly belonging to the CSIRO - is an enticement in its own right. "Nearly every major company is there," said Weatherly. "The nature of the area is an incentive in itself."

Although Accolade Computer Services, a point-of-sale software reseller, moved into the North Ryde area around five years ago, the decision was prompted by a need to be close to its customers. The result, however, was that as their customers spread far and wide, the area gained in reputation.

"[Accolade moved] basically because of the geographic location, and not because North Ryde was an IT hub," Madeline Smith, marketing coordinator for Accolade Computer Services said. "People know North Ryde, and associate it with IT. When they see you've got a North Ryde address it gives you credibility, because all the big players are there."

Besides prestige, being close to suppliers is often a highly valuable element when selecting an address. With supply issues constantly pressing resellers, the likelihood of getting the proverbial runaround by a supplier whose premises is just next door, is potentially diminished.

Accolade's Smith acknowledges the benefits of being able to "just pop in" on suppliers to get the latest information on when products are likely to arrive. And having some suppliers "just down the road, cuts down on freight cost too", Smith added.

Around the grounds

A snapshot of five of Australia's emerging IT hubs

Sydney - Riverside Corporate Park and suburb of North Ryde

Channel companies include:

Sola Australia Limited

Accolade Computer Services

Harris Technologies

Melbourne - area surrounding South Melbourne and St. Kilda Road.

Channel companies include:

Com Tech

Professional Service Integrators

Austnet Support Group

Adelaide - Mawson Lakes Technology Park

Channel companies include:

CSC Australia

Daronmont Technologies

System Planning

Brisbane - Suburbs of Milton, Fortitude Valley and Newstead

Channel companies include:

Netwise

Fujitsu Australia

Datec (QLD)

Perth - Technology Park WA (located in Bentley, 6kms southeast of Perth)

Channel companies include:

AOT Consulting

Softline Solutions

Solid Technologies


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